Govt readies five-year roadmap for fiscal control

The government will soon unveil a “credible and feasible” five-year fiscal consolidation roadmap to curb deficits, finance minister P Chidambaram said on Monday.

“After carefully examining the feedback on the Kelkar Committee’s report, it is our intention to announce a credible and feasible path of fiscal correction beginning this year (2012-13) and ending with the fifth year of the 12th Plan ( 2012-17),” he said at the annual economic editors conference here.

The plan to rein in the deficit, expected to be close to 6% of GDP this year from the budgeted 5.1%, broadly draws from the fiscal consolidation roadmap that a committee headed by former finance secretary Vijay Kelkar has said in a recent report.

High fiscal deficit — shorthand for the amount of money that the government borrows to fund its expenses — limiting its elbow room to spend on investing in infrastructure and development schemes to spin jobs and multiply income.

Chidambaram also said reforms were necessary to push India’s growth above 8%.